Directories and databases can be one of the most lucrative online subscription businesses, especially for B2B information. In this Case Study, John Gabbert, CEO & Founder at PitchBook, spoke to us about how the site gets its killer content, pricing group subscriptions, and the downloadable reports that are their best lead gen device for live demos.
Company Profile
Founded: 2007
No. of Publications: 1
Employees: 150 Full-time
Business Model: Mainly subscription
Paying Subscribers: 400-500 firms with site licenses
Location: Seattle, WA
Website: www.pitchbook.com
Target Market
PitchBook’s target audience ranges from small boutique advisory firms to large investment banks, all of which are interested in venture capital (VC) and private equity (PE) information. PitchBook tracks all the money flowing from institutions, endowments, pension plans, insurance companies, family offices, to advisory firms, investment banks, law firms, accounting firms, consultants, lenders, and corporate development departments.
Content
PitchBook provides its target market with proprietary research and data for private equity and venture capital activities. The site has a various online tools to help industry professionals find, share and use information to make better decisions, allowing subscribers to create presentation-ready charts and track deals from initiation to exit in a platform optimized for company workflow.
Most of the information PitchBook collates, codes and organizes in unavailable for free online — at least not in the same depth or breadth or convenient format. As Gabbert says, PitchBook looks “to provide a product that helps clients make better, more informed decisions, in a more efficient way. “
PitchBook thinks of itself as a research firm first, not an informational publisher, and thus is willing to invest heavily in research analysts to create its dynamic and in-depth content. PitchBook’s 80 full-time analysts are constantly in touch with companies, investors, advisory firms via phone, email, online surveys, etc. The analysts track about a few hundred thousand entities. PitchBook also uses a lot of crawlers and bots to search and index publicly-available data. The site has six full-time staffers focused on quality control, and two focused on usability and design.
New updates to the member area are added every day.
Revenue Streams
PitchBook garners $12 million to $15 million a year in revenues, 90% of which comes from subscriptions. 10% comes from newsletter advertising, sponsorships and providing certain clients with data feeds of specific VC and PE data.
Since all of PitchBook’s subscriptions are sold on a site license basis, the subscription prices vary by size. The most basic subscription costs $21,500 and comes with five seats. Additional seats cost $3,600 per person. Occasionally the site will get a request from a two-man shop and reduce their pricing for such clients.
Current group subscriptions range from two to 100 seats. Most subscribers have six to eight seats.
Marketing Tactics
Most of PitchBook’s new traffic comes through organic search and newsletter referrals. The site does not use paid search.
Acquisitions often come through downloadable reports. Gabbert told us that these reports get between 3,000 and 5,000 downloads a month.
PR
PitchBook is able to generate PR by providing analyses and custom data requests for print, Web, broadcast and radio outlets. This is a great PR tactic that all informational databases should be using; it’s much more effective and interesting for journalists that press releases. All media outlets have an almost unlimited appetite for new research findings, statistics and data that has some news value. PitchBook is about to hire a new PR person to lead national and regional campaigns, but the company’s previous efforts have already led to mentions on Bloomberg News, CNBC, DealBook, The Wall Street Journal and other business media outlets.
Trade Show Events
PitchBook has a presence at many trade show conferences (e.g., Association for Corporate Growth , Turnaround Management Association), both through speakers and booths.
Social Media
The site does have active social media profiles on Twitter and LinkedIn. The site gets quite a bit of traffic from LinkedIn, and a lot from the venture side on Twitter, but is still exploring ways to utilize this medium.
Conversion Tactics
PitchBook does not require an email address for access to free content on the site, but they do require it for their various free downloadable reports and newsletters — which are also their best lead generation devices. It also has various professionally-produced videos — including PitchBook TV– that serve and lead generation.
After a prospect downloads a report or newsletter, PitchBook’s 30 people sales team will contact them via phone or email to set up a time for a live demo of PitchBook. (The company has 6 inside sales people, 12 new business development managers and 12 to provide client support.) These calls allow PitchBook to assess a prospect’s needs and provide a customized quote. The conversion rate from free download to live demo is in the double digits, says Gabbert.
PitchBook will sometimes offer a free trial right after the live demo.
The site is “willing to make it easy” for any and all subscribers to pay, so it accepts wire transfers, checks or credit cards. It will also send out paper invoices if requested. Gabbert told us most people pay by check or wire transfer.
The site does test to improve conversions, but usually in alpha and beta testing.
Retention Tactics
Stunningly, PitchBook currently has a 100% renewal rate.
Gabbert attributes this renewal rate primarily to the site’s content, customer support and a user-friendly interface: “We are in the information business, and the first key is to have the best possible data. We have 80 research analyst today to ensure we provide the best information possible. We also use a lot of custom built software to make they very efficient at managing workflow, research processes and quality assurance. “
In addition to the six people working on client support, PitchBook also has two full-time staffers dedicated to usability.
Cross-Sales and Upsales
PitchBook will often try to upsell more seats on a site license. It will also sell certain bells and whistles, like plugins with Salesforce.
The site primarily uses data mining of its own customer database to identify the best prospects. In addition, the 80 research analysts who are talking to clients all day long and well-positioned to hear customer needs and upsell them appropriate products.
About John Gabbert
John Gabbert got his start in finance, and started a company called VentureOne in San Francisco that utilized his interest in research. Over the years, he’s “grown deeper” into the paid database business.
His biggest surprise thus far has been 2009. The company launched their paid platform then, after two years of loading data and building the site’s front-end. They got their first client in the first quarter of 2009, which was a surprise because of the recession, and have been growing steadily ever since.
His advice to other online content professionals is to focus on building something useful. “We focus on building things that help people do their jobs better. There’s always “cool” things to do, but we try to focus on client needs.”
Vendors & Technology
PitchBook handles a variety of functions in house, from web development to content creation to analytics, but uses the following third-party vendors for support:
Hosting & Email management — Rackspace
www.rackspace.com/
Payment processing — Intuit
www.intuit.com/
Inter-office communications — Atlassian Confluence
www.atlassian.com/software/confluence
Live Demos/Webinars — GoToMeetings
www.gotomeeting.com/
Subscription Site Insider Analysis
First and foremost, we’d like to congratulate PitchBook on having some killer UX design. The site’s design is clean and modern, while still being professional and easily tailored to custom searches. We’re also impressed by the site’s revenues and price points. And we especially like it when databases and directories use their access to in-depth knowledge to create reports to generate media buzz, instead of boring old press releases. And the 100% renewal rate is impressive, to say the least.
The model employed by Pitchbook is common among companies selling high tech, high value business information: a focus on generating leads that are pursued and closed by an inside sales team. This has the obvious advantage of allowing the company to chase large dollar sales, but tends to result in a site being very locked-up in terms of content.
On the whole, we have few recommendations since the site seems to be optimizing as much as it can for its market and usability. PitchBook might see an uptick in traffic if it concentrated a bit more on SEO. This of course is where a critical balance must be struck: SEO depends on freely accessible content, and the sites with the most valuable content are naturally reluctant to make much available. A viable middle ground is to create educational content that serves SEO purposes without giving away too much data. The educational content might be industry analysis and statistics that provide aggregate industry data, while further reinforcing the credibility and credentials of Pitchbook to the marketplace.
